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Apple: Why This Is The Right Time To Strike At The Enemy

Wednesday - 3/20/2013, 4:34pm  ET

Well, the good news is about to be revealed for diehard Apple loyalists. If recent reports are to be believed, the company’s quarterly dividend yield will go up by a whopping 56%, making it one of the best paying companies among peers in the country’s tech scenario. If that’s what Apple is planning to do with its load of cash, this may be another very good reason why this continues to remain the ‘mother of all tech stocks,’ despite rival Google’s meteoric rise in stock price.

The news is certainly a welcome relief from the stormclouds that have been brewing over the Cupertino skyline for quite some time now, with a certain enemy from foreign shores constantly knocking on the very gates of tech giant Apple’s well-maintained fortress. But now, for those of you that remain interested in the long term picture, that very enemy should provide a host of reasons to cheer for Apple fans. Here are a few thoughts as to why rival Samsung’s ‘too fast too soon’ approach may not work to its advantage in the near term.

What makes Apple and Samsung similar

To start with, both Apple and Samsung tend to have a fundamental similarity in working at upgrades of a single line of smartphones. While the former boasts of the formidable iPhone line, the latter waxes eloquent about its worthy opponent – the Galaxy line of phones. So, while both of them do not bring a completely new product on the table each year or even every alternate year, Samsung does have an edge in the wide range of pricing of its Galaxy range of phones.

What makes the difference

Since Apple has not decided to diversify the price range as of now, let’s have a brief conversation on the so-called ‘technologically light years ahead’ features of the latest Samsung biggie – the S IV. For instance, software that responds to eye movements or a sweep of the hand may be good if you want to show off the device to friends. But would they really be of any help when you use the phone in practical, everyday life? Come to think of it, even Samsung’s much-touted NFC feature in the S III has very little use in practical life as yet. Apple avoided it altogether in the iPhone 5. Smart thinking, I should say. And even with tons of features, sales of the Galaxy S III were unable to catch up even with a two-generation old iPhone 4. By now, Samsung should realize that fancy upgrades and an even fancier launch party will not take it far.

The ‘Tizen’ factor

As some of you may know by now, the Galaxy S IV may be Samsung’s last big Android-based smartphone launch. The company is now focusing all its efforts at launching phones based on the new open-source Tizen operating system. At the same time, it will surely be quite some time before Tizen manages to gain a firm foothold in a market dominated by Apple’s iOS, Google’s Android, Research in Motion or BlackBerry’s BB10 and Microsoft’s Windows being run on Nokia phones. In fact, 87.8% of smartphones marketed worldwide run on either Android or Apple’s iOS, as per Stratecgy Analytics. And then again, Tizen may be a dampener like Samsung’s earlier Bada software.

Any discussion about Tizen makes one thing obvious – the Google-Samsung Android-based collaboration, that has been Apple’s biggest threat for quite some time now, is set to be reversed soon. Samsung now faces twin competition from Apple as well as Google. This is because Google has finally realized that Samsung is minting money, partly based on its own operating system. In that sense, Google’s over $12-billion worth acquisition of Motorola Mobility has rightly been described as an ‘insurance policy’ against Samsung. The rumored Google X-phone project being handled by Motorola Mobility makes it clear that the Android dominance is set to last for quite some time now. At the same time, Apple always had and will have its own share of loyalists running the iOS on their iPhones and iPads.

The ‘enterprise’ scenario

Leaving aside features and operating systems, the third big fight in today’s smartphone world is about grabbing a major share of enterprise customers. Samsung made a start with the unveiling of its Knox security software that it’s peddling to enterprise customers. But a recent report by Kaspersky stating that 94% of all malware written in this world is meant specifically for Android might make things difficult for Samsung though. That also means a perennial pain point for Google, much to Apple’s delight. Samsung’s development of Tizen-based phones may prove to be a different story, but then mass acceptance might take ages.

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